Digital deployment costs money.......................................
multichannel.com
People's Choice May Tie Web to Digital
By MONICA HOGAN
Wireless cable operator People's Choice TV Corp. has stopped marketing its analog-video service -- a choice that the company said it made independently of its decision earlier this month to delay the launch of its digital-video service. The company decided to hold off on its digital plans indefinitely, pending the resolution of integration problems with new digital set-top boxes from NextLevel Systems Inc.
Michael Whalen, vice president of finance and acquisitions for People's Choice, said the company has not set a timetable for the launch, but it hopes that all of the integration problems will be resolved sometime in 1998.
Whalen said People's Choice has stopped marketing its analog-video service because the company wants to conserve capital, and the returns on the capital that it takes to market analog-wireless-cable service "are abysmal."
The current customer base for People's Choice's analog-video service has been slowly declining, said Whalen, because the company is not replacing customers as they churn out. The one exception is Tucson, Ariz. That market requires less fixed overhead, said Whalen, and there are tremendous line-of-sight opportunities there.
When the company does introduce a digital-video service, it may offer Internet access as the lead product, with digital video as an add-on. Whalen said that although such a strategy could lead to fewer subscribers, they would be higher-paying customers. By bundling services to consumers, Whalen also hopes that churn rates will be lower. Even so, Whalen said there's no imminent need for People's Choice to raise new capital through 1998.
Whalen predicted that People's Choice would test-market its digital-video service first in Chicago or Phoenix. The company's next step would depend on available capital and the results of the test launch. "A digital-video system requires a tremendous amount of capital," said Whalen.
For its digital-video launch, People's Choice does not plan to use a packaged service such as Tele-Communications Inc.'s Headend in the Sky. Whalen said the company would handle the 120 digital-video and 30 digital-audio channels through its own headend. |
